Title: Sephora, JCPenney Align Beauty Forces

Sephora U.S.A. Inc. and J. C. Penney Company (JCP) Inc. announced a joint initiative under which Sephora will open "store-within-stores" and be the exclusive beauty offering in JCP stores, beginning as early as fall 2006. The Sephora in JCP stores will feature top brands from makeup, skin care, fragrance and accessory products carried in Sephora's 120 stores across the U.S.

Each JCP Sephora will be in a prominent location in the center core of the store, and will feature the signature Sephora look and be staffed with a professional team of product consultants trained under the "Science of Sephora" education program.

"We see this initiative with JCPenney as a way to dramatically increase our retail presence while we continue our core strategy of aggressively building free-standing stores across the country," said David Suliteanu, president and chief executive officer, Sephora U.S.A., in a press announcement.

"JCPenney's focus on providing relevant merchandise to its broad customer base is consistent with our objectives. This includes America's youngest women, a market in which JCPenney is a significant and rapidly growing factor.” In addition, Sephora will exclusively service the JCP consumer's online beauty needs through a link to www.sephora.com from www.jcp.com, which recently surpassed US$1 billion in annual revenues.

"Our initiative with Sephora is a clear reflection of the transformation underway at JCPenney as we seek to build an emotional connection with our current customers and bring new customers into our stores and onto www.jcp.com,” said Myron E. Ullman, III, chairman and CEO, JCP, in a prepared statement. “Our customer has been telling us that she wants a beauty and cosmetics selection that is new, exciting, and within her reach. There is simply no better partner to allow us to achieve that than Sephora, the most revolutionary, innovative retailer in the beauty industry.”